Trends and Opportunities in Mobile and Internet Space in China and Rest of the World

Monday, June 16, 2008

You can sell your own Ads on YouTube

Google has been cracking their heads how to find the best way to monetize YouTube. The latest idea: Let content creators sell ads. The company will start allowing professional content producers that have their own sales teams start selling their own ads on their YouTube channels, according to Advertising Age.

Creators will be able to sell spots including video overlays and the display ads on the pages surrounding videos. Producers sell the ads, and YouTube takes a cut.

Despite doing the heavy lifting, the good news for creators is that it gives them control over which ads appear with their content and expands the inventory they can offer to a potential sponsor. According to Advertising Age, Revision3 is selling its own ads on YouTube with GoDaddy already on board.

And YouTube gets more than money out of the deal, it gets exposure in the ad agency world, and offers high-profile content creators another reason to join the YouTube family.

YouTube has always had the “how will it make money?” Monetizing YouTube, which dominates the online video space more completely than Google dominates search, has become a main priority for Google this year. Estimates on YouTube's revenues for 2008 range from $70 million to $200 million. Even on the high end that's just 1% of Google's yearly revenue.

Earlier this year, Google launched a free viewer analytics program for YouTube content creators, which should be helpful in selling their own inventory.

Google launched video ads last August offering two things to advertisers: a huge pre-built distribution network (via YouTube), and sophisticated bidding and campaign tracking tools (via AdSense). For publishers, Google can offer a sophisticated monetization strategy, and they can also offer hosting.

The Partner Program was halfway there, and letting content creators sell their own ad inventory is one step closer to giving more control to the content creators.

For many professional content creators and producers, being able to control the inventory that surrounds their videos is an important factor when they consider where and how to distribute content online. Revision3, the online-video-production company behind shows such as "Diggnation" and "Techzilla," is selling advertising on YouTube, starting with GoDaddy, a sponsor that's regularly integrated into the content of its shows.

Nobody has cracked the online video advertising yet and nobody can tell whether this path taken by Google is going to ride well but one thing for sure, giving the control to the content creators and producers and letting them decide what content goes with which advertisers seem to be a tastier flavor than pure reliance on Google to randomly choose.